Egypt's Orascom Construction Industries (OCI) has made a good recovery from the summer slump, its shares rising from LE 31.69 on 8th August to LE 47.10 on the 7th September.

This 50 percent rise reflects its robust performance during a difficult period for the industry.

Real estate companies, such as Nasr City Housing have also suffered. OCI's results for the second quarter of 2000, released last week, show profits up 33.6 percent on the first quarter of this year to LE 80.6 million.

Revenues grew by 8.4 percent, though a major contributor to the improved bottom line was the sale of OCI's stake in the City Gas Company for LE 20.4 million. ($1=EL3.5)

OCI's stated aim of becoming a building materials company with construction and infrastructure arms seems to be becoming a reality - the building materials group's now contributes 36 percent of revenues and 42% of profits.

OCI's management believes that by diversifying its sources of income the company can avoid the worst effects of recession, and it has established a number of building materials companies, many in partnership with foreign companies.

Egyptian Cement (ECC) is the most important of these building materials companies: it is the most producer in a highly competitive industry, and is due to open two more production lines in the next two years. ECC is a joint venture with major cement producer Holderbank.

OCI's regional expansion will give it protection against Egypt's macroeconomic risk, as does its Contrack International subsidiary, which executes US Government contracts.

OCI is currently building cement plants in Algeria and the Palestinian Authority. OCI's financial structure - its building materials subsidiaries are owned by a holding company - takes advantage of Egypt's tax exemptions for new companies, improving shareholder value.

The company will vote at an extraordinary general meeting in September on a 1:4 stock dividend increasing the company's paid-in capital to LE 750 million.